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Pinterest (PINS) Down 1.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Pinterest (PINS - Free Report) . Shares have lost about 1.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Pinterest due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Pinterest reported mixed second-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. The bottom line missed the Zacks Consensus Estimate but the top line beat the same.
Quarter Details
The company reported a GAAP net loss of $43.1 million or a loss of 7 cents per share against a net income of $69.4 million or 10 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $77.4 million or 11 cents per share compared with $169.9 million or 25 cents per share in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 6 cents.
Revenues in second-quarter 2022 rose 8.6% year over year to $665.9 million and beat the consensus estimate of $660 million. The top-line growth was driven by 25% rise in spend commitments from joint businesses. While revenues from the United States and Canada increased 7% year over year to $542 million, that from Europe and the Rest of the World soared 10% and 71%, respectively, to $102 million and $22 million.
User Base
Monthly active users (MAUs) declined 5% from the prior-year quarter to 433 million globally as the unwinding of pandemic restrictions led to lower customer engagements as users spent more time outside. In addition, lower search traffic triggered by an algorithm change by Google in November and higher competition from other video-centric consumer apps led to lower customer engagements. While the United States and Canada's MAUs decreased 8% to 92 million, Europe and the Rest of the World's MAUs were down 4% and 3%, respectively, from the year-ago quarter to 117 million and 223 million.
Global average revenue per user (ARPU) increased 17% from a year ago to $1.54 buoyed by solid advertising demand. While ARPU in the United States and Canada increased 20% to $5.82, Europe and the Rest of the World’s ARPU surged 20% and 80%, respectively, to 86 cents and 10 cents.
Operating Details
Pinterest’s second-quarter 2022 operating costs increased 29.2% year over year to $700.4 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 28.5% to $233.5 million. Sales and marketing expenses surged 29% to $212 million.
Adjusted EBITDA (14% of total revenues) was $92 million in second-quarter 2022, down from $178.2 million (29% of total revenues). The company has made key hires to augment the organization that it believes will drive growth in the long term. It also caught up with some original plans for creator-led marketing.
Balance Sheet
As of Jun 30, 2022, Pinterest had cash and cash equivalents of $1,641.5 million, with $192.5 million of operating lease liabilities. The company generated $333.5 million of cash from operations in the first six months of 2022 compared with $375.4 million in the prior-year period.
Guidance
Pinterest expects third-quarter revenues to grow mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to grow low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35-40% year over year because of inflation and supply chain issues faced by many advertising partners.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -600% due to these changes.
VGM Scores
At this time, Pinterest has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Pinterest has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Pinterest belongs to the Zacks Internet - Software industry. Another stock from the same industry, Snap (SNAP - Free Report) , has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
Snap reported revenues of $1.11 billion in the last reported quarter, representing a year-over-year change of +13.1%. EPS of -$0.02 for the same period compares with $0.10 a year ago.
For the current quarter, Snap is expected to post a loss of $0.02 per share, indicating a change of -111.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Snap has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Pinterest (PINS) Down 1.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Pinterest (PINS - Free Report) . Shares have lost about 1.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Pinterest due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Pinterest (PINS - Free Report) Q2 Earnings Miss Estimates, Revenues Beat
Pinterest reported mixed second-quarter 2022 results with a year-over-year increase in revenues driven by strong demand from joint businesses. The bottom line missed the Zacks Consensus Estimate but the top line beat the same.
Quarter Details
The company reported a GAAP net loss of $43.1 million or a loss of 7 cents per share against a net income of $69.4 million or 10 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $77.4 million or 11 cents per share compared with $169.9 million or 25 cents per share in the year-ago quarter. The figure missed the Zacks Consensus Estimate by 6 cents.
Revenues in second-quarter 2022 rose 8.6% year over year to $665.9 million and beat the consensus estimate of $660 million. The top-line growth was driven by 25% rise in spend commitments from joint businesses. While revenues from the United States and Canada increased 7% year over year to $542 million, that from Europe and the Rest of the World soared 10% and 71%, respectively, to $102 million and $22 million.
User Base
Monthly active users (MAUs) declined 5% from the prior-year quarter to 433 million globally as the unwinding of pandemic restrictions led to lower customer engagements as users spent more time outside. In addition, lower search traffic triggered by an algorithm change by Google in November and higher competition from other video-centric consumer apps led to lower customer engagements. While the United States and Canada's MAUs decreased 8% to 92 million, Europe and the Rest of the World's MAUs were down 4% and 3%, respectively, from the year-ago quarter to 117 million and 223 million.
Global average revenue per user (ARPU) increased 17% from a year ago to $1.54 buoyed by solid advertising demand. While ARPU in the United States and Canada increased 20% to $5.82, Europe and the Rest of the World’s ARPU surged 20% and 80%, respectively, to 86 cents and 10 cents.
Operating Details
Pinterest’s second-quarter 2022 operating costs increased 29.2% year over year to $700.4 million due to higher brand marketing campaigns and headcount increase. In the reported quarter, research and development expenses increased 28.5% to $233.5 million. Sales and marketing expenses surged 29% to $212 million.
Adjusted EBITDA (14% of total revenues) was $92 million in second-quarter 2022, down from $178.2 million (29% of total revenues). The company has made key hires to augment the organization that it believes will drive growth in the long term. It also caught up with some original plans for creator-led marketing.
Balance Sheet
As of Jun 30, 2022, Pinterest had cash and cash equivalents of $1,641.5 million, with $192.5 million of operating lease liabilities. The company generated $333.5 million of cash from operations in the first six months of 2022 compared with $375.4 million in the prior-year period.
Guidance
Pinterest expects third-quarter revenues to grow mid-single digits on a year-over-year basis. Non-GAAP operating expenses are expected to grow low double digits percent sequentially. For 2022, non-GAAP operating expenses are likely to increase 35-40% year over year because of inflation and supply chain issues faced by many advertising partners.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -600% due to these changes.
VGM Scores
At this time, Pinterest has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Pinterest has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Pinterest belongs to the Zacks Internet - Software industry. Another stock from the same industry, Snap (SNAP - Free Report) , has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
Snap reported revenues of $1.11 billion in the last reported quarter, representing a year-over-year change of +13.1%. EPS of -$0.02 for the same period compares with $0.10 a year ago.
For the current quarter, Snap is expected to post a loss of $0.02 per share, indicating a change of -111.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Snap has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.